STATISTICAL BRIEF #528:
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February 2020 | |||||||||||||||||||||||||||||||||||||||||||
Emily M. Mitchell, PhD |
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Highlights
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IntroductionIn 2017, spending on health care accounted for 17.9 percent of the United States GDP,[1] yet the majority of this spending was concentrated in a relatively small percentage of the population. In fact, about 15 percent of the U.S. civilian noninstitutionalized population had no health care expenditures in 2017, and only 5 percent of the population accounted for over half of health care spending. This includes all sources of payments for medical care, including private insurance payments, Medicare, Medicaid, out-of-pocket spending, and other sources.In this Statistical Brief, data from the Agency for Healthcare Research and Quality's (AHRQ) Medical Expenditure Panel Survey Household Component (MEPS-HC) are used to describe the overall concentration of health care expenses across the U.S. civilian noninstitutionalized population in 2017. In addition, different spending tiers are compared on selected dimensions including age, race/ethnicity, type of medical service, and aggregate spending distributions by source of payment. All differences discussed in the text are statistically significant at the 0.05 level. |
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FindingsOverall (table 1, figures 1 and 2)In 2017, the top 1 percent of persons ranked by their health care expenditures accounted for 21.9 percent of total health care expenditures (100 minus 78.1 percent; figure 1), with an annual mean expenditure of $116,331 (figure 2). The group within the top 1 percent is defined as persons who spent $66,454 or more during the year. Cut-points for additional percentile groups are shown in table 1. The top 5 percent of the population accounted for 50.1 percent of total expenditures (100 minus 49.9 percent), with an annual mean expenditure of $53,174. The bottom 50 percent accounted for only 2.9 percent of total health care expenditures. Persons in this group spent less than $1,051 during the year (table 1), with an average annual expenditure of $305.
Age (figure 3) Older persons were disproportionately represented in the higher health care spending tiers (figure 3). Among the entire U.S. civilian noninstitutionalized population in 2017, 16.2 percent were 65 and older, while 22.7 percent were under age 18. Among the top 5 percent of spenders, however, 41.7 percent were 65 and older, while only 6.4 percent were children under age 18. In contrast, among the bottom 50 percent of spenders, 30.7 percent were children while only 5.5 percent were 65 years and older. Race/Ethnicity (figure 4)Whites were disproportionately represented among the top 50 percent of spenders, while Hispanics were underrepresented in this higher spending group. Whites comprised 59.9 percent of the U.S. civilian noninstitutionalized population in 2017 but accounted for 69.6 percent of the top half of spenders. Hispanics, on the other hand, comprised 18.3 percent of the population but only 12.5 percent of the top half of spenders. Type of service (figure 5)Compared to the overall population, expenses for persons in the bottom 50 percent of spenders were less likely to go toward inpatient stays or home health expenses (0.1 percent for each), and more likely to go toward ambulatory events (54.3 percent). In the top 5 percent of spenders, on the other hand, 39.5 percent of their expenses were for inpatient stays. This comparatively high proportion of expenditures is a combination of the fact that persons in the top spending percentiles are much more likely to have at least one inpatient stay during the year, and those stays tend to cost more relative to other types of service. Source of payment (figure 6)Nearly half of aggregate expenses for the bottom 50 percent of spenders were paid for by private insurance (47.4 percent), while out-of-pocket payments accounted for around a quarter of the expenditures for this group (26.7 percent). Medicare payments comprised only 4.0 percent of payments for this low-spending group. For persons in the top 5 percent spending tier, Medicare paid for 33.7 percent and private insurance paid for 38.6 percent of medical expenses. Out-of-pocket payments for this group comprised only 5.7 percent of total expenses. |
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Data SourceThe estimates shown in this Statistical Brief are based on data from the MEPS 2017 Full Year Consolidated File (HC-h201). |
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DefinitionsAgeAge was defined as age at the end of the year 2017 (or on last date of MEPS eligibility if person was out of scope at the end of the year). Concentration curve A concentration curve is a graphical representation of the distribution of a variable of interest, such as income or expenditures, across the percentage of the population. The cumulative percentage of the population is represented along the X-axis and the cumulative percentage of expenditures is represented on the Y-axis. A point at the X-axis value of 50% and the Y-axis value of 10%, for instance, indicates that the bottom 50% of the population accounts for 10% of total spending, and conversely, the top 50% accounts for 90% of total spending. Similarly, a point at the X-axis value of 99% and the Y-axis value of 82% indicates that the bottom 99% of the population accounts for 82% of spending, and conversely, that the top 1% of the population accounts for 18% of expenditures. Expenditures Total expenditures were defined as the sum of payments from all sources to hospitals, physicians, other health care providers (including dental care), and pharmacies for services reported by respondents in the MEPS-HC. Percentiles Percentiles of spending were formed by ordering sampled persons by their total expenditures from highest to lowest, then allocating persons to groups based on weighted percentage of the population. Near the cut point of each percentile, a person was included in the top percentile group if their added weight did not surpass the specified percentile. In the case of ties, where two or more people had the same expenditures close to a percentile cut point, the person with the lower weight was included in the higher percentile group. In this brief, the 'Bottom 50%' and 'Top 50%' are mutually exclusive, while the 'Top 50%', 'Top 30%','Top 10%', 'Top 5%' and 'Top 1%' are not. Race/Ethnicity MEPS respondents were asked if each family member was Hispanic or Latino and about each member's race. Based on this information, categories of race and Hispanic origin were constructed as follows:
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About MEPSThe MEPS-HC is a nationally representative survey that collects detailed information on health care utilization and expenditures, health insurance, and health status, as well as a wide variety of social, demographic, and economic characteristics for the U.S. civilian noninstitutionalized population. The MEPS-HC is cosponsored by the Agency for Healthcare Research and Quality (AHRQ) and the National Center for Health Statistics (NCHS). More information about the MEPS-HC can be found on the MEPS Web site at https://meps.ahrq.gov/. |
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ReferencesThe following methodology reports contain information on the survey and sample designs for the MEPS Household and Medical Provider Components (HC and MPC, respectively). Data collected in these two components are jointly used to derive MEPS health care expenditure data.Cohen, J. Design and Methods of the Medical Expenditure Panel Survey Household Component. MEPS Methodology Report No. 1. AHCPR Pub. No. 97-0026. Rockville, MD. Agency for Healthcare Policy and Research, 1997. https://meps.ahrq.gov/data_files/publications/mr1/mr1.shtml Ezzati-Rice, T.M., Rohde, F., Greenblatt, J. Sample Design of the Medical Expenditure Panel Survey Household Component, 1998–2007. Methodology Report #22. March 2008. Agency for Healthcare Research and Quality, Rockville, MD. https://meps.ahrq.gov/data_files/publications/mr22/mr22.shtml Machlin, S.R., Chowdhury, S.R., Ezzati-Rice, T., DiGaetano, R., Goksel, H., Wun, L.-M., Yu, W., Kashihara, D. Estimation Procedures for the Medical Expenditure Panel Survey Household Component. Methodology Report #24. September 2010. Agency for Healthcare Research and Quality, Rockville, MD. https://meps.ahrq.gov/data_files/publications/mr24/mr24.shtml Stagnitti, M.N., Beauregard, K., and Solis, A. Design, Methods, and Field Results of the Medical Expenditure Panel Survey Medical Provider Component (MEPS MPC)—2006 Calendar Year Data. Methodology Report #23. November 2008. Agency for Healthcare Research and Quality, Rockville, MD. https://meps.ahrq.gov/data_files/publications/mr23/mr23.shtml |
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Suggested CitationMitchell, E.M. Concentration of Healthcare Expenditures and Selected Characteristics of Persons with High Expenses, U.S. Civilian Noninstitutionalized Population, 2017. Statistical Brief #528. February 2020. Agency for Healthcare Research and Quality, Rockville, MD. https://meps.ahrq.gov/data_files/publications/st528/stat528.shtml |
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AHRQ welcomes questions and comments from readers of this publication who are interested in obtaining more information about access, cost, use, financing, and quality of health care in the United States. We also invite you to tell us how you are using this Statistical Brief and other MEPS data and tools and to share suggestions on how MEPS products might be enhanced to further meet your needs. Please email us at MEPSProjectDirector@ahrq.hhs.gov or send a letter to the address below: Joel W. Cohen, PhD, Director Center for Financing, Access, and Cost Trends Agency for Healthcare Research and Quality 5600 Fishers Lane, Mailstop 07W41A Rockville, MD 20857 |
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[1] Sisko, A, et al. National Health Expenditure Projections, 2018-7: Economic and Demographic Trends Drive Spending and Enrollment Growth. Health Affairs, March 2019. |
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